Weekly Twitter Digest (Link Roundup) for 2012-10-06

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

13 comments:

  1. 1

    From NYT article linked above:

    For some time, executives at Redfin, an online real estate brokerage firm, grumbled to themselves that better-known real estate sites like Zillow and Trulia didn’t have all the property listings that Redfin and other sites had. So Glenn Kelman, the chief executive of Redfin, finally set out to prove it.

    It’s nice to quantify the number of inaccurate listings on Zillow and Trulia, but it’s hardly something that needed to be “proven.” That the listings were incomplete and stale was well-known. The executives at Redfin were hardly the only one making those claims.

    The broker sites have 100% accuracy because they get the data feeds directly, at least locally.

  2. 2
    The Tim says:

    RE: Kary L. Krismer @ 1 – As Glenn pointed out on Bloomberg TV, it’s well-known within the industry, but not among consumers. I bet if you asked 10 random people on the street maybe 2 or 3 would be aware of how bad the data is on Zillow and Trulia.

  3. 3

    RE: The Tim @ 2 – I’d be surprised if 3 could even recognize the names Trulia and Zillow. ;-)

    My comments were more about the way the article started out. It makes it sound like only a few people at Redfin knew it was a problem, when in reality the problems were well known. Many of the non-agents here even know about the problem, but you’re right, the average person does not.

  4. 4
    Lo Ball Jones says:

    Not that it would ever, ever happen here…but….

    Vancouver housing market plunges further

    The residential real estate market in Metro Vancouver continues to plunge, with home and apartment sales in September down 32 per cent from the same month last year, according to the Real Estate Board of Greater Vancouver.

    Read more: http://bc.ctvnews.ca/vancouver-housing-market-plunges-further-1.980542#ixzz28XwafbjL

  5. 5
    ARDELL says:

    RE: Lo Ball Jones @ 4

    That Vancouver Article says ““There’s been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government-insured mortgages,” The change is that with less than 20% down the amortization maxes out at 25 year under their new federal rules in BC.

    Also the median home price is $735,000 in Vancouver and the change to 25 year max amortization was done as an attempt to cool off their market, which apparently has been successful to its purpose.

  6. 6
    Nick says:

    Once you factor in the portion of your mortgage payment you get to keep in the form of equity and tax deductions, owning can cost you half as much as renting if you’re in a high tax bracket.

  7. 7
    HappyRenter says:

    “Even when closing costs, maintenance, taxes and insurance are factored in, owning typically is less expensive than renting in every metropolitan area in the country.”

    Really?? Can somebody make an example? In Seattle you pay 1500-1700$ per month to rent a 2-3 bedroom apartment in a desirable area. In order to buy a home (that is not a dump) in the same area and a similar square footage, you need to look at 500,000$ and above. So using http://www.mortgagecalculator.org I ran the following numbers:

    Home Value: 500,000$
    Loan amount: 400,000$
    Interest rate: 3.5 %
    Loan term: 30 years
    Property tax: 1.25 %
    PMI: 0.5 %

    The website returns:
    Monthly Payment: $2,317.01

    How is buying cheaper than renting? Even if you purchase a 400,000$ home with 20% down you still pay $1,853.61/month and you haven’t included maintenance costs. My personal experience is that renting in (North) Seattle is cheaper than buying, unless you are willing to buy a shack near a busy street. What am I missing?

  8. 8
    HappyRenter says:

    RE: HappyRenter @ 7
    Tim has already extensively commented on Trulia’s article:

    https://seattlebubble.com/blog/2012/09/14/nonsense-from-trulia-buying-42-cheaper-than-renting/

    That answers my question.

  9. 9
    bd says:

    By HappyRenter @ 7:

    What am I missing?

    The “depends” part — like it depends on where in the metropolitan area you want to buy or rent.

    Your mortgage calc is a bit off also. Property tax in the city is more like .9% in Seattle and your PMI should be zero, since you are laying down 20%. I think that may put you under $1800 which puts you in the “debatable” range for affordability, depending on personal circumstances
    and how you are laying your bets for future trends on taxes, the economy, and the housing and equity markets.

  10. 10
    HappyRenter says:

    RE: bd @ 9
    The website http://www.mortgagecalculator.org returs $2,171.18 per month with PMI 0 and taxes 0.9% (on a 500,000 $ home with 20% down and 3.5% interest). I’m not sure what mortgagecalculator includes in the calculation that makes the monthly payments so high.

  11. 11
    HappyRenter says:

    By bd @ 9:

    By HappyRenter @ 7:

    What am I missing?

    Your mortgage calc is a bit off also. Property tax in the city is more like .9% in Seattle and your PMI should be zero, since you are laying down 20%. I think that may put you under $1800 which puts you in the “debatable” range for affordability, depending on personal circumstances and how you are laying your bets for future trends on taxes, the economy, and the housing and equity markets.

    Using a different website (http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx) I calculated that $1800 would be just the mortgage. If you add 375$ property taxes (0.9 % per year) you get 2170$. That doesn’t include water/garbage/sewage and repair costs. Adding those brings you to well above 2500$ per month. No matter what owning is more expensive than renting (for similar properties in the same neighborhood). I’m not saying that buying is not a good thing, but buying a home will definitely not lower your monthly bills and this needs to be considered when thinking about purchasing a property.

  12. 12
    Doug says:

    RE: HappyRenter @ 7

    I don’t think if you compare renting a house to paying on a house it’s a lot closer :-)

  13. 13
    Doug says:

    On the topic of Zillow, I always had a major beef with them. Their main offering is the Zestimate. They’ll hem and haw about how it’s voluntary, and meant to be taken with a grain of salt. But I think we can agree that it’s the thing that differentiates them.

    Well, they falsify their data. Our house was Zestimated $30,000 higher than we paid for it. After the purchase they dropped the Zestimate to the purchase price; there was a sharp vertical downturn in the Zestimate graph. Nothing wrong with that, right?

    So a few months after that they say they’re ‘adjusting their formula’. Now, our Zestimate graph shows a smooth curve into the actual purchase price. I check several other properties we were following, and they did the same things with them. They were erasing their old data, and writing it over with new, smoother graphs showing a more predictive and accurate Zestimate. Somehow this doesn’t bother anyone. To me, that’s just flat-out falsifying past data, mirepresenting the value of the sole differentiator of their site.

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